---

Public Services

My Lords, my noble friend Lady Walmsley raised a number of important issues in an excellent opening speech to a very important debate. The fact that the noble Lord, Lord Warner, called the issues that she raised quaint smacks of enormous complacency in a number of areas, two of which I will explore in my speech. I want to concentrate on the lack of transparency in two areas. First, the line between the public and the private has become so blurred that it is very hard for the public to follow lines of accountability; that is not acceptable. It is clear to the public that they pay for such services, especially at this time of year when council tax bills land on their doormats and their tax returns have just been filed. A blurring of that line undermines the very reason behind a democratic structure at national and local level. The problem for the public is that the line between the public and private sectors in the provision of what are traditionally known as public services used to be defined by who delivered the service. The noble Lord, Lord Warner, is right that the model where the public sector both commissioned and delivered the service is very old-fashioned. I am not commending a return to the days when DLOs delivered everything without question. However, the public are not aware of who is delivering the service beyond the fact that they are on the receiving end. They see the lorries of the waste collector or the vans of the sub-contractor and that is the nearest that they come to knowing who is delivering the service. The niceties of who has commissioned the service and of the contract are not something that they are privy to. Does that matter if the service is excellent? Do the public want to know who is delivering the service? The noble Lord, Lord Warner, said that the public are indifferent. In the short term it is true; they only want to know if something goes wrong. In the long term the blurring of the line, if it is not replaced with anything else, has enormous implications for the important connection between the public and their services, and for democracy itself. Of course, we have moved on from the days when DLOs delivered everything, and the days under the Conservative Government when compulsory competitive tendering ruled the day and the work went to the lowest-price bidder, no matter that the lowest price often represented the worst value. Authorities were unable to question that. There are advantages in the public and private sectors working together; for example, in the management skills and financial acumen of the business community and by bringing better value for taxpayers. In the long term, however, we have a long way to go to get the model right. I do not believe that times have moved on significantly. In 2002, the Institute for Public Policy Research looked into some of the 378 PFI projects completed by central and local government and found that only 23 had been completed on time and had had an independent value-for-money examination by independent audit bodies. In 2003, the Audit Commission looked at the operation of the early PFI school contracts. It reached some important conclusions, such as that: "““The synergies expected to come from the PFI process had failed to materialise. That type of auditing exercise must now be urgently repeated across other policy areas, particularly in the NHS and the prison sector””." Both those examples are from some years ago and I expect that the Minister will be able to say that matters have improved substantially in those bodies. However, in 2006, in its strategic plan, the Audit Commission recognised that there was a real problem with transparency. It said: "““If local public bodies are to improve services in ways that people recognise and value, they need to engage better with local people. The governance frameworks that underpin accountability for public money and improving services are evolving””." ““Evolving”” is a rather nice euphemism for saying that they are virtually non-existent and there is a very long way to go. At the moment, one reason why the public often choose litigation, encouraged by certain solicitors, is that it is the clear and obvious route. I do not think that any of us believe that litigation offers the most desirable way forward in public services. The accountability model would mean that the public were involved and understood how to break into the difficult cycle of drawing up contracts. When does anyone go to their local authority and say, ““We would be interested in the contract being delivered differently””? It is hard enough for local authority members let alone normal people to know when to break into the cycle of a PCT and say, ““What we are receiving is unsatisfactory. We would like it to be delivered differently””. Matters such as the contract cycle, who draws them up and how to make a difference are extremely opaque. That other line of accountability, the ballot box, also becomes undermined if the system is opaque as people will become apathetic, depressed and unable to address the issues. There is an enormous need for these matters to be much more clearly outlined. I turn to another issue that my noble friend highlighted in her Motion: parliamentary accountability. I was struck by comments of Sir Peter Gershon, in November 2006, when he was talking about the public sector of environmental services. He said: "““In some areas I believe there has to be greater collaboration. I look at environmental services, I could not find a single person in the public sector, who could tell me what the structure of the supply market looked like for environmental services. How many companies there were, were they increasing or reducing, or was business equally spread?""So I went to one of the suppliers in the market and asked them, and they said would you like me to email it to you or send it through the post and you can have it tomorrow morning. It actually told me that over a five-year period the number of suppliers was reducing. How can the public sector procure efficiently without that information? It is just about smart procurement””." That is a worrying situation, but I am sure the Minister will have an answer for it. It is on the public procurement side of a fairly centralised system, but I deal with Defra, which has an extensive list of quangos—over 60—many of which are very large; for example, the Environment Agency, which is busy outsourcing. To have any idea of what is being purchased, by whom and to what effect becomes very complicated. In not giving quangos complete independence, the Government remain able to keep a handle on them. However, they often choose that as an excuse to slope shoulders and claim that the Government are not responsible for what that particular body does. I give the Minister a couple of examples. One is the Food Standards Agency, which does a valuable job. The Government claim that it is independent—it is at arm’s length—yet it clearly is responsible to the Department of Health. How do the public concentrate on getting the Food Standards Agency, for example, to address the issues in which they are interested—and the FSA has a better record than most in holding public meetings and making the records of them publicly available? Even within Defra there are several bodies which do not meet in public and do not have publicly available records. The picture is very complicated. I refer the Minister to a debate in which I was involved last year about accountability to Parliament of a public body. The Minister will recall there was a considerable debate around the cuts in funding to the Centre for Ecology and Hydrology. Its parent body—NERC—was created by royal charter, and NERC's website says it is accountable to Parliament. Yet it seemed that it was not that accountable. I accept that it needs to be responsible for commissioning scientific research without political interference, but we were talking about decisions of cutting public funding that had united both the scientific and the political establishments, and still the Science Minister, the noble Lord, Lord Sainsbury, was able to say that: "““As for parliamentary accountability, it has always been clear that the council is accountable for its performance””,—[Official Report, 20/3/06; col. 10.]" but not for anything else. That means that even though a body may have a charter making it responsible to Parliament, Ministers can decide that where it is inconvenient it is not accountable to Parliament. In reply to a similar question from me, the noble Lord, Lord Bach, said: "““I understand the legal position … NERC is an independent body and the decisions that it reaches are solely for its own council””.—[Official Report, 15/3/06; col. 1278.]" That draws up the fact that, if a body is stated to be accountable to Parliament, certainly it should be. I close by re-emphasising my support for the stand of my noble friend Lady Walmsley on very large private organisations such as Capita being subject to proper scrutiny. She was completely right when she said that that is the sort of issue that the Competition Commission should be considering and that if it was in any other sector, it would be called into question. The fact that the public are not aware of who is delivering the service, except when something goes wrong, means that there is not much demand from them for such scrutiny. It is not like the supermarkets, for example, where that is very plain, which is why the Competition Commission recognised that there was public concern. If the public heard and understood the points made by my noble friend today, they too would have deep concern and would fully back her call.